|The Board of Directors have the pleasure of presenting the 22nd Annual
Report of the Bank together with the Audited Statement of Accounts,
Auditors' Report and the Report on the business and operations of the
Bank for the financial year ended 31st March 2016.
The financial highlights for the year under review are presented below:
Particulars 2015-16 2014-15 Growth
Deposits 357,967.56 322,441.94 11.02%
Out of which
Savings Bank Deposits 105,793.13 88,292.08 19.82%
Current Account Deposits 63,651.92 56,108.22 13.45%
Advances 338,773.72 281,083.03 20.52%
Out of which
- Retail Advances 138,520.90 111,932.27 23.75%
Non-retail Advances 200,252.82 169,150.76 18.39%
Total Assets/Liabilities 525,467.62 461,932.39 13.75%
Net Interest Income 16,832.97 14,224.14 18.34%
Other Income 9,371.46 8,365.04 12.03%
Out of which
- Fee Income 7,501.97 6,778.98 10.67%
- Trading Profit(1) 1,246.91 1,134.94 9.87%
- Misc. Income 622.58 451.12 38.01%
(excluding depreciation) 9,656.91 8,798.07 9.76%
Profit before Depreciation/
Provisions and Tax 16,547.52 13,791.11 19.99%
Depreciation 443.91 405.67 9.43%
Provision for Tax 4,170.09 3,699.01 12.74%
Other Provisions and
Write offs 3,709.86 2,328.61 59.32%
Net Profit 8,223.66 7,357.82 11.77%
Statutory Reserve 2,055.92 1,839.46 11.77%
Investment Reserve (41.81) 25.49
Transfer to Capital
Reserve 62.04 63.14 (1.74%)
Transfer to Reserve Fund 1.74 (1.27) -
Proposed Dividend(2) 2.81 1,308.96 -
Surplus carried over
to Balance Sheet 6,142.96 4,122.04 -
(1) Excluding Merchant
(2) According to the Companies (Accounting Standards) Amendment Rules/
201 6, proposed dividend is not recognized as a liability as on 31st
Key Performance Indicators 2015-16 2014-15
Interest Income as a percentage
of working funds* 8.59% 8.81%
Non-interest Income as a
percentage of working funds* 1.96% 2.08%
Net Interest Margin 3.90% 3.92%
Return on Average Net Worth 17.49% 18.57%
Operating Profit as a
percentage of working funds* 3.38% 3.33%
Return on Average Assets 1.72% 1.83%
Profit per Employee** Rs,17.83 lacs Rs,17.07 lacs
Business (Deposits less
Advances) per employee** Rs,14.84 crores Rs,13.71 crores
Net non-performing assets
as a percentage of net
customer assets*** 0.70% 0.44%
* Working funds represent average total assets
** Productivity ratios are based on average number of employees for the
*** Customer assets include advances and credit substitutes
representing Non-SLR investments through primary market Previous year
figures have been re-grouped wherever necessary
This year has been a mix of opportunities and challenges for the Indian
Banking sector. Despite the challenges the Bank continues to perform
well, by leveraging upon its branch network and innovative electronic
channels, a well-developed retail franchise and a number of key
corporate and SME relationships. During the year, the Bank continued to
expand its network, as we believe that both physical branches and
digital channels will co-exist to create the superior customer
experiences which continue to remain the corner stone of our vision and
strategy. The Bank's retail businesses grew steadily during the year
and there was credible growth of both retail deposits and loans,
supported by an expanding network that is critical to the retail
franchise. Our corporate advances portfolio grew higher than industry
growth rates as we continue to find attractive refinancing
opportunities for highly rated corporate that are new relationship
additions to the Bank's franchise.
The Bank continued to show a healthy growth in both business and
earnings, with a net profit of Rs,8,223.66 crores for the year ended
31st March 2016, registering a growth of 11.77% over the net profit of
Rs,7,357.82 crores last year. The operating profit of the Bank
increased by 20.31% to Rs,16,103.61 crores from Rs,13,385.44 crores
last year. The Bank continued to focus on the quality of growth and
displayed strong growth in key balance sheet parameters for the year
ended 31st March 2016. The total assets increased by 13.75% to
Rs,525,468 crores, total advances increased by 20.52% to Rs,338,774
crores. The total deposits of the Bank increased by 11.02% to
Rs,357,968 crores against Rs,322,442 crores last year. Savings Bank
deposits increased by 19.82% to Rs,1 05,793 crores, while Current
Account deposits increased by 13.45% to Rs,63,652 crores and together
constituted 47% of total deposits as compared to 45% last year.
The Bank continued to enhance its shareholder value by delivering
healthy financial return ratios. Basic Earnings Per Share (EPS) was
Rs,34.59 compared to Rs,31.18 last year, while the Diluted Earnings Per
Share was Rs,34.40 compared to Rs,30.85 last year. Return on Equity
(RoE) stood at 1 7.49% compared to 1 8.57% last year, and Return on
Assets (RoA) stood at 1.72% compared to 1.83% last year. The Net
Interest Margin (NIM) for the year was 3.90% compared to 3.92% last
year. The ratio of Gross NPAs to gross customer assets stood at 1.67%,
and Net NPA ratio (Net NPAs as percentage of net customer assets) was
0.70%. The Bank's provision coverage stood at 72.27% after considering
During the year, 12,309,627 equity shares of Rs,2 each were allotted by
the Bank to some of its Directors/Employees and that of its subsidiary
companies, pursuant to exercise of options by them under the various
Employee Stock Option Schemes of the Bank. Pursuant to said allotment,
the total issued and paid-up equity share capital of the Bank increased
to Rs,476.57 crores, as compared to Rs,474.10 crores as on 31st March
The shareholding pattern of the Bank as on 31st March 2016, was as
Sr Shareholder/ Category No. of Shares held % of Paid-up
1 Administrator of the
of the Unit Trust of
India (SUUTI) 27,48,40,905 11.53
2 Life Insurance
India (LIC) 34,88,60,225 14.64
3 General Insurance
Corporation of India 4,05,95,000 1.70
4 The New India
Limited 2,61,03,585 1.10
5 National Insurance
Company Limited 47,47,285 0.20
6 The Oriental
Limited 63,30,020 0.27
7 United India
Limited 69,27,714 0.29
8 Overseas Investors
OCBs/NRIs) 98,29,06,791 41.25
9 Foreign Direct
Investment (GDR issue) 7,99,57,720 3.36
Funds/Banks/NBFC 24,67,36,628 10.35
11 Others 36,48,25,953 15.31
Total 238,28,31,826 100.00
The said equityshares are listed on the National Stock Exchange of
India Limited (NSE) and BSE Limited (BSE). The Unsecured Redeemable Non
Convertible Debentures issued by the Bank on a private placement basis
are listed on NSE and BSE. The Global Depository Receipts (GDR) issued
by the Bank are listed on the London Stock Exchange. The Bonds issued
by the Bank under the MTN programme are listed on the Singapore Stock
Exchange. The Bank has paid the listing fees to the said Stock
Exchanges for the current financial year.
Amendment to Articles of Association (AOA) of the Bank
The Shareholders of the Bank had by means of a special resolution
passed on 10th May 2016, through Postal Ballot approved the amendments
to the relevant provisions of the Articles of Association (AOA) of the
Bank. The new AOA of the Bank which has come into effect from 10th May
201 6, is in compliance with the relevant provisions of the Companies
Act, 201 3, Rules made there under, the Banking Regulation Act, 1949,
the Guidelines issued by the Reserve Bank of India from time to time
and the SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015 (Listing Regulations), including any statutory
amendment(s), modification(s), variation or re-enactment thereof.
In terms of the new AOA, SUUTI and LIC has the power to nominate one
director each on the Board of the Bank and the Board would have the
authority to appoint the Non-Executive Chairman of the Bank.
Application to the Foreign Investment Promotion Board (FIPB) for
increase in the foreign investment limits
In terms of the Consolidated Foreign Direct Investment (FDI) Policy,
the FIPB, Department of Economic Affairs, Ministry of Finance, New
Delhi had granted its approval to the Bank to increase the overall
foreign investment limit from 49% to 62% of its total paid up share
capital, subject to the condition that the aggregate investments of
Foreign Institutional Investors (Flls) in the Bank does not exceed 49%
of its total paid up share capital, subject to compliance with other
The Ministry of Commerce and Industry, Government of India vide Press
Note No. 12 (201 5 Series) dated 24th November 201 5 reviewed and
amended the said FDI Policy on various sectors including the Private
Sector Banks. The permissible limits of foreign investment in Private
Sector Banks was increased to 74% of their total paid up share capital
on a fully fungible basis, subject to the limits prescribed in amended
Clause 22.214.171.124.2.4 (i) of the revised FDI Policy.
Accordingly, the Bank had sought the approval of the FIPB to increase
the foreign investment limit from 62% to 74% of its total paid up share
capital on a fully fungible basis, subject to the limits prescribed in
amended Clause 126.96.36.199.2.4 (i) of the revised FDI Policy.
As on 31th March 2016, the total foreign investment in the Bank was
44.61% of its total paid up share capital. The staid increase in
foreign investment limit would enable the Bank to enhance Shareholders
value and provide flexibility to the Bank to raise long term capital
from foreign investors, subject to compliance with the revised FDI
The said application made by the Bank seeking to increase the foreign
investment limit from 62% to 74% of its total paid up share capita on a
fully fungible basis, has been recommended by the FIPB for the approval
of the Cabinet Committee on Economic Affairs (CCEA).
The Diluted Earnings Per Share (EPS) of the Bank for the financial year
201 5-1 6 has risen to Rs,34.40 from Rs,30.85 per equity share of Rs,2
each in the previous year. In view of the overall performance of the
Bank and with the objective of rewarding the Shareholders of the Bank
with cash dividends while retaining capital to maintain a healthy
capital adequacy ratio to support future growth, the Board of Directors
of the Bank at its Meeting held on 26th April 2016, recommended a
dividend of Rs,5.00 per equity share of Rs,2 each for the financial
year 2015-16, as compared to Rs,4.60 per equity share of f2 each, for
the financial year 201 4-1 5. The sand increase reflects our confidence
in the Bank's ability to consistently grow earnings over time.
Closure of Share Transfer Books and Record Date for Dividend
The Register of Members and the Share Transfer Books of the Bank will
be closed from Saturday, 9th July 201 6 to Friday, 22nd July 2016 (both
days inclusive) for the purpose of the 22nd Annual General Meeting of
the Shareholders of the Bank to be held on Friday, 22nd July 2016 and
for determining the entitlement to dividend, if any, declared by the
Bank for the financial year ended 31st March 2016.
The Record Date for payment of the said dividend, if approved by the
Members at the 22nd Annual General Meeting, has been fixed on Friday,
8th July 2016. The said dividend shall be paid to those Members whose
name appears on the Register of Members of the Bank/ the Statements of
Beneficial Ownership as received from the Depositories, as at the close
of business hours on Friday, 8th July 2016.
Ratings of various Debt Instruments
The Unsecured Redeemable Non Convertible Debentures issued by the Bank,
on a private placement basis, during the financial year 201 5-1 6, were
rated "AAA" by CRISIL, CARE and ICRA.
The Bonds issued by the Bank under the MTN programme, during the
financial year 201 5-1 6, were rated "AAA" by CRISIL, CARE and ICRA.
Board of Directors
During the year, the following changes took place in the composition of
the Board of Directors of the Bank:
Smt. Shikha Sharma was re-appointed as the Managing Director and CEO of
the Bank for a further period of three years with effect from 1st June
2015 up to 31st May 201 8, in terms of the approval granted by the
Reserve Bank of India (RBI) and the Shareholders of the Bank at the
last Annual General Meeting held on 24th July 2015.
Smt. Ireena Vittal resigned as an Independent Director of the Bank,
with effect from the close of business hours on 23rd August 2015. The
Board places on record its appreciation for the contributions made by
Smt. Ireena Vittal during her tenure as an Independent Director of the
At the meeting of the Board of Directors held on 24th July 201 5, Shri
V. Srinivasan was re-appointed as the Executive Director & Head
(Corporate Banking) of the Bank for a period of 3 years, with effect
from 15th October 2015 to 14th October 2018, subject to the approval of
the RBI and the Shareholders of the Bank. Thereafter, at the meeting of
the Board of Directors held on 27th October 2015, the Board
re-designated Shri V. Srinivasan as the Deputy Managing Director of the
Bank with effect from 1 5th October 2015, subject to the approval of
the RBI and Shareholders of the Bank. However, in terms of the approval
granted by the RBI, Shri V. Srinivasan took charge as the 'Deputy
Managing Director' of the Bank, for a period of 3 years, with effect
from 21st December 2015. The approval of Shareholders of the Bank, will
be obtained at the 22nd Annual General Meeting to be held on 22nd July
201 6. In order to comply with the provisions of Section 1 52 of the
Companies Act, 201 3, Shri V Srinivasan will retire by rotation at the
22nd Annual General Meeting and being eligible has offered himself for
Shri Rakesh Makhija was appointed as an Independent Director of the
Bank, for a period of five consecutive years, with effect from 27th
October 2015, subject to the approval of the Shareholders of the Bank
at the 22nd Annual General Meeting of the Bank. During the said tenure,
Shri Rakesh Makhija shall not be liable to retire by rotation.
Smt. Ketaki Bhagwati was appointed as an Independent Director of the
Bank, for a period of five consecutive years, with effect from 1 9th
January 2016, subject to the approval of the Shareholders of the Bank
at the 22nd Annual General Meeting of the Bank. During the said tenure,
Smt. Ketaki Bhagwati shall not be liable to retire by rotation.
Shri Prasad R. Menon was re-appointed as an Independent Director of the
Bank for his second term, with effect from 23rd January 2016 up to 8th
October 201 8 (both days inclusive). The approval of the Shareholders
of the Bank was obtained through Postal Ballot on 22nd December 201 5.
During the said tenure, Shri Prasad R. Menon shall not be liable to
retire by rotation.
Shri K. N. Prithviraj, (Nominee of SUUTI) ceased to be the
Non-Executive Director of the Bank, with effect from the close of
business hours on 8th January 201 6. The Board places on record its
appreciation for the contributions made by Shri K. N. Prithviraj during
his tenure as the Non-Executive Director of the Bank.
Shri B. Babu Rao, (Nominee of SUUTI) was appointed as a Non-Executive
Director of the Bank, liable to retire by rotation, with effect from
19th January 2016, subject to the approval of the Shareholders of the
Bank at the 22nd Annual General Meeting of the Bank.
The tenure of Dr. Sanjiv Misra, (Nominee of SUUTI) as the Non-Executive
Chairman of the Bank, ended on 7th March 201 6. In terms of SUUTI's
letter dated 8th March 201 6, the Board of Directors of the Bank
re-appointed Dr. Sanjiv Misra as the Non-Executive Chairman of the
Bank, for a period of three months, with effect from 8th March 201 6,
subject to the approval of the RBI and the Shareholders of the Bank.
However, in terms of the approval granted by the RBI, the said
re-appointment was approved for a period of three months, with effect
from 11th March 201 6. The approval of the Shareholders of the Bank was
obtained through Postal Ballot on 1 0th May 2016.
Shri Sanjeev Kumar Gupta, Executive Director (Corporate Centre) of the
Bank retired from the services of the Bank, with effect from the close
of business hours on 18th March 2016. The Board places on record its
deep appreciation and gratitude for the valuable services rendered by
Shri Sanjeev Kumar Gupta during his tenure as an Employee / Executive
Director of the Bank.
Apart from the above, no other Director was appointed or has resigned
or has retired during the financial year 201 5-1 6.
Pursuant to the amendments to the AOA of the Bank, the right of
nomination available to SUUTI to nominate the Chairman of the Bank got
rescinded. In view of the above, Dr. Sanjiv Misra resigned as the
Non-Executive Chairman of the Bank (as a nominee of SUUTI), with effect
from 11th May 2016.
Thereafter, in terms of the new Article 90 of the AOA of the Bank, the
Board of Directors at its meeting held on 12th May 2016 appointed Dr.
Sanjiv Misra as an Independent Director and as the Non-Executive
(Part-time) Chairman of the Bank, for a period of five consecutive
years, with effect from 12th May 201 6, subject to the approval of the
RBI and the Shareholders of the Bank at the 22nd Annual General Meeting
of the Bank.
Shri Rajiv Anand, Group Executive (Retail Banking) of the Bank was
appointed as the Director of the Bank and as the Whole time Director
designated as the 'Executive Director (Retail Banking)' of the Bank,
for a period of three years, with effect from 12th May 2016, subject to
the approval of the RBI and the Shareholders of the Bank at the 22nd
Annual General Meeting of the Bank. During the said tenure, Shri Rajiv
Anand shall be liable to retire by rotation.
Shri Rajesh Dahiya, Group Executive & Head (Corporate Centre) of the
Bank was appointed as the Director of the Bank and as the Whole time
Director designated as the 'Executive Director (Corporate Centre)' of
the Bank, for a period of three years, with effect from 12th May 201 6,
subject to the approval of the RBI and the Shareholders of the Bank at
the 22nd Annual General Meeting of the Bank. During the said tenure,
Shri Rajesh Dahiya shall be liable to retire by rotation.
The above appointments were made after taking into consideration the
experience, knowledge, skills and expertise that the said persons would
bring to the Board and the requirements as prescribed under Section 10A
of the Banking Regulation Act, 1949.
The ordinary resolutions in respect of the Directors who are to be
appointed/ re-appointed, as aforesaid, have been included in the Notice
convening the 22nd Annual General Meeting of the Bank to be held on
22nd July 2016. A brief profile of the said Directors have been annexed
to the said Notice.
Selection and Appointment of Directors
The appointment of Directors of the Bank are done in accordance with
the relevant provisions of the Companies Act, 201 3, the relevant Rules
made there under, the Banking Regulation Act, 1 949, the Guidelines
issued by the RBI, in this regard, from time to time and the Listing
The Bank adheres to the process and methodology prescribed by the RBI
in respect of' Fit & Proper 'criteria as applicable to Private Sector
Banks, signing of deed of covenants which binds the Directors to
discharge their responsibilities to the best of their abilities,
individually and collectively in order to be eligible to be appointed
as a Director of a Bank. The prescribed declarations given by the
Directors other than members of the Nomination & Remuneration Committee
(NRC) are placed before the NRC and the declarations given by the
Members of the NRC are placed before the Board, for its review and
noting. The said declarations from the Directors are obtained at the
time of their appointment / re-appointment in compliance with the said
laws. Assessment on whether the Directors fulfill the said criteria is
also made by the NRC and the Board on an annual basis.
The Members of the NRC reviews the structure, size, composition of the
Board, the regional and industry experience, track record, expertise
and other relevant information and documents of the directors before
making appropriate recommendations to the Board with regard to their
appointment, re-appointment, remuneration and assignment of duties
(nomination to various Committees of the Board) designed to enhance the
Board's effectiveness. The NRC also identifies potential candidates
from diverse backgrounds including but not limited to accountancy,
agriculture and rural economy, banking, co-operation, economics,
finance, law, small-scale industry, information technology, core
industries, infrastructure sector, thus providing the Board with
members who have special knowledge, practical experience and skills, to
serve the business interest of the Bank.
Declaration of Independence
All the Independent Directors of the Bank have given their respective
declarations stating that they meet the criteria of independence as
laid down under the applicable laws and in the opinion of the Board,
the Independent Directors meet the said criteria.
Key Managerial Personnel
Shri Jairam Sridharan was appointed as the Chief Financial Officer
(CFO) of the Bank, with effect from 28th October 2015, in place of Shri
Sanjeev Kumar Gupta, Executive Director (Corporate Centre) of the Bank
who had stepped down as the CFO of the Bank. Currently, Shri Jairam
Sridharan is designated as the 'Group Executive & CFO' of the Bank.
Shri Girish V. Koliyote was appointed as the Company Secretary of the
Bank, with effect from 1st May 2015, in place of Shri Sanjeev Kapoor
who had resigned as the Company Secretary of the Bank, with effect from
the close of business hours on 30th April 2015.
The Board has conducted annual evaluation of the performance of all its
Directors, Committees of the Board and that of its Non-Executive
Chairman, in terms of the relevant provisions of the Companies Act, 201
3, the Rules made there under and the Listing Regulations.
The Bank had engaged the services of an external consultant to help it
to conduct an impartial and independent Board evaluation, as aforesaid.
On the basis of their findings, a process of evaluation was recommended
to the Board for adoption. The manner in which the evaluation was
conducted by the Bank has been explained in the Report on Corporate
Governance, which is forming part of this report.
The schedule of the meetings of the Board and the Committees thereof
for the next financial year is circulated well in advance to all the
Members of the Board, for their consideration and approval. During the
year, 5 meetings of the Board of Directors of the Bank were held and
the gap between the said meetings did not exceed the limit of 120 days,
as prescribed under the relevant provisions of the Companies Act, 201
3, the Rules made there under and the Listing Regulations.
The composition, role and functions of the Audit Committee of the Board
of Directors of the Bank is disclosed in the Report on Corporate
Governance, which is forming a part of this report.
The Bank has formulated and adopted a Remuneration Policy for its
Directors, Key Managerial Personnel and other Employees, in terms of
Section 1 78 of the Companies Act, 201 3, the Rules made there under and
the Listing Regulations. The details of the Remuneration Policy have
been disclosed in the Report on Corporate Governance, which is forming
part of this report.
Whistle Blower Policy and Vigil Mechanism
The details of the Whistle Blower Policy and Vigil Mechanism have been
disclosed in the Report on Corporate Governance, which is forming part
of this report.
As on 31st March 2016, the Bank has the following nine unlisted
i) Axis Asset Management Company Ltd. undertakes the activities of
managing the mutual fund business.
ii) Axis Bank UK Ltd. is the banking subsidiary of the Bank in the
United Kingdom and undertakes the activities of banking.
ii) Axis Capital Ltd. provides services relating to investment
banking, equity capital markets, institutional stock broking, mergers
and acquisition advisory, etc.
iv) Axis Finance Ltd. is an NBFC and carries on the activities of loan
against shares, margin funding, IPO financing, etc.
v) Axis Mutual Fund Trustee Ltd. acts as the trustee for the mutual
vi) Axis Private Equity Ltd. primarily carries on the activities of
managing equity investments and provides venture capital support to
vii) Axis Securities Ltd. is primarily in the business of marketing of
credit cards and retail asset products and also provides retail broking
viii) Axis Trustee Services Ltd. is engaged in trusteeship activities,
acting as debenture trustee and as trustee to various securitization
ix) Axis Securities Europe Ltd. is engaged in financial advisory
During the financial year 2015-16, the Bank acquired the entire share
capital of Axis Securities Europe Ltd., its step-down subsidiary
company, at a consideration of fl 9.02 crores from Axis Capital Ltd., a
wholly owned subsidiary of the Bank. Accordingly, Axis Securities
Europe Ltd. became a wholly owned subsidiary company of the Bank, with
effect from 19th August 2015.
In accordance with the provisions of Section 129(3) of the Companies
Act, 201 3 read with Rule 8 of Companies (Accounts) Rules, 2014 as
amended, the Bank has prepared its consolidated financial statement
including that of all of its subsidiary companies, which is forming
part of this report. The financial position and performance of each of
its subsidiary companies are given in the statement containing the
salient features of the financial statements of the said subsidiary
companies, which forms part as an annexure to this report.
In accordance with third proviso to Section 1 36(1) of the Companies
Act, 201 3, the Annual Report of the Bank, containing therein its
standalone and the consolidated financial statements has been hosted on
its website www.axisbank.com. Further, as per fourth proviso to the
said section, the audited annual accounts of each of the said
subsidiary companies of the Bank have also been hosted on the Bank's
Any shareholder who may be interested in obtaining a physical copy of
the aforesaid financial statements may write to the Company Secretary
of the Bank at its Registered office. Further, please note that the
said financial statements will be available for inspection by the
Shareholders of the Bank at the Registered Office of the Bank during
business hours from 11.00 a.m. to 1.00 p.m. on all working days except
Saturdays, Sundays, Bank Holidays and National Holidays.
Related Party Transactions
All related party transactions entered into during the financial year
were on an arm's length basis and in the ordinary course of the
business of the Bank. Accordingly AOC-2 is not applicable to the Bank.
All related party transactions are placed before the Audit Committee of
the Board of Directors (ACB) for its approval. Prior omnibus approval
of the Audit Committee of the Board is obtained for the transactions,
which are of foreseen and repetitive nature. A statement giving details
of all related party transactions, entered pursuant to the omnibus
approval so granted, is placed before the ACB for their review on a
quarterly basis. The Bank has developed a Standard Operating Procedure
for the purpose of identifying and monitoring such transactions. The
policy on Related Party Transactions as approved by the Board at its
meeting held on 19th January 2016 has been hosted on the Bank's
website. During the year under reference, the Bank has not entered into
any transaction with any related party, which may be deemed to be
material, in terms of explanation to Regulation 23 of the Listing
The Ministry of Corporate Affairs (MCA) vide its notification dated
25th May 201 5 had empowered the ACB to grant omnibus approval for
related party transactions on an annual basis, in line with the Listing
Regulations. Further, the MCA vide its notifications dated 14th
December 2015 had provided that the Board of Directors should approve
the criteria based on which the ACB could accord such omnibus approval.
Accordingly, the criteria to be considered by ACB for granting such
omnibus approval was approved by the Board of Directors of the Bank at
its meeting held on 19th January 2016.
Employee Stock Option Plan (ESOP)
Since the financial year 2000-01, the Bank has formulated and adopted
several Employee Stock Option Schemes (ESOS), in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1 999/ Securities and
Exchange Board of India (Share Based Employee Benefits) Regulations,
201 4, as amended, from time to time. The objective of the said ESOS is
to enhance employee motivation, enable employees to participate,
directly or indirectly, in the long-term growth and financial success
of the Bank, to act as a retention mechanism by enabling employee
participation in the business as an active stakeholder and to usher in
an 'owner-manager' culture.
Under the said ESOS, up to 240,087,000 options can be granted to the
eligible Directors / Employees of the Bank and that of its subsidiary
companies. The eligibility and number of options to be granted to the
eligible Directors / Employees is determined on the basis of their
performance and such other criteria as may be approved by the NRC /
Board of Directors of the Bank, from time to time.
During the period from February 2001 to July 201 3, the Shareholders of
the Bank had approved the grant of stock options to the eligible
Directors / Employees of the Bank and that of its subsidiary companies
as aforesaid on six occasions. Under the first two Schemes and in
respect of the grants made up to 29th April 2004, the option conversion
price was set at the average daily high-low price of the Bank's equity
shares traded during the 52 weeks preceding the date of grant at the
Stock Exchange which had the maximum trading volume of the Bank's
equity share during that period. Under the third and subsequent Schemes
and with effect from the grants made by the Bank on 10th June 2005 and
thereafter, the pricing formula has been changed to the latest
available closing price of the equity shares of the Stock Exchange
recording higher trading volume, on the day prior to the date of grant.
Pursuant to the sub-division of the equity shares of the Bank, the
Shareholders of the Bank at the 20th Annual General Meeting held on
27th June 2014, also approved the consequent adjustments to the stock
options granted to the eligible Directors / Employees of the Bank and
that of its Subsidiary Companies under its various Schemes, such that
all stock options available for grant (including lapsed and forfeited
options available for reissue) and those already granted but not
vested/exercised as on record date fixed for the purpose of
sub-division, were proportionately converted into options bearing
equity shares of the face value of Rs,2 each of the Bank and the grant
price of all the outstanding stock options (vested, unvested and
unexercised) as on the said record date were proportionately adjusted
by dividing the existing grant price by 5. The record date for the said
sub-division was 30th July 2014.
Since 24th February 2001 up to 1 0th September 201 5, the NRC / Board,
had out of the 240,087,000 options, approved the grant of 239,1 19,950
options in terms of the various Schemes. The said options are
non-transferable and vest at rates of 30%, 30% and 40% on each of three
successive anniversaries following the date of respective grant,
subject to standard vesting conditions. The said options are required
to be exercised by the concerned Directors / Employees of the Bank and
that of its Subsidiary Companies, within a period of three / five
years, from the date of its respective vesting.
As of 31st March 2016, out of the said 239,119,950 options so granted,
198,869,586 options had been vested and exercised, 15,670,500 options
had been unvested and 24,579,864 options had been treated as
Other statutory disclosures as required under Regulation 14 of the SEBI
(Share Based Employee Benefits) Regulations, 2014 have been hosted on
the website of the Bank, http://www.axisbank.com/download/other
The Listing Regulations which was notified by the Securities and
Exchange Board of India on 2nd September 2015 has replaced the
erstwhile Clause 49 of the Listing Agreement, with effect from 1st
The Bank is committed to achieve the highest standards of Corporate
Governance and it constantly benchmarks itself with best practices in
this regard. The Report on Corporate Governance for the financial year
2015-2016 along with a Certificate from the Statutory Auditors of the
Bank confirming compliance with the conditions relating to Corporate
Governance as stipulated under Chapter IV of the Listing Regulations,
is forming part of this report. The Corporate Governance framework of
the Bank incorporates all the mandatory requirements set out in the
Directors' Responsibility Statement
The Board of Directors of the Bank hereby declares and confirms the
following statements, in terms of Section 134(3)(c) of the Companies
a. That in the preparation of the annual accounts for the year ended
31st March 2016, the applicable accounting standards had been followed
along with proper explanation relating to material departures.
b. That such accounting policies as mentioned in Note 1 8 of the Notes
to accounts of the Financial Statements have been selected and applied
consistently and judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Bank as at 31st March 2016 and of the profit of the
Bank for the year ended on that date.
c. That proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 201 3 for safeguarding the assets of the Bank and for
preventing and detecting fraud and other irregularities.
d. That the annual accounts have been prepared on a going concern
e. That internal financial controls to be followed by the Bank, were
in place and that the same were adequate and were operating
f. That proper system to ensure compliance with the provisions of all
applicable laws was in place and the same were adequate and operating
Extract of Annual Return
Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1)
of the Companies (Management and Administration) Rules, 2014, the
extract of the Annual Return in Form MGT 9, is provided as an annexure
to this report.
Particulars of Employees
The information required pursuant to Section 197 read with Rule 5 (1)
of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, in respect of employees of the Bank forms part as an
annexure to this report.
As on 31st March 2016, the Bank had 163 employees who were employed
throughout the year and were in receipt of remuneration more than Rs,60
lakhs per annum and 53 employees who were employed for part of the year
and were in receipt of remuneration of more than Rs,5 lakh per month.
In terms of Section 136 of the Companies Act, 2013, the copy of the
financial statements of the Bank, including the consolidated financial
statements, the auditor's report and relevant annexure to the said
financial statements and reports are being sent to the Members and
other persons entitled thereto, excluding the information in respect of
the said employees containing the particulars as specified in Rule 5
(2) of the said Rules, which is available for inspection by the Members
at its Registered Office during business hours of the Bank up to the
date of the ensuing Annual General Meeting. If any Member is interested
in obtaining a copy thereof, may write to the Company Secretary of the
Bank at its Registered Office. The financial statements and other
reports of the Bank annexed thereto have been hosted on the website of
the Bank, www.axisbank.com.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The steps taken /impact on conservation of energy:
The Bank has always considered energy and natural resource conservation
as a focus area and has been consciously making efforts towards
improving the energy performance year on year. Energy efficiency
improvement initiatives have been implemented across all the plants and
offices by undertaking various energy and resource conservation
projects for Sustainable development.
The Bank ensures strict compliance with all the statutory requirements
and has taken several sustainable steps voluntarily to contribute
toward better environment. Select few steps /impact are listed below:
Implementation of solar energy of aggregate ~2.7 MW spread over select
Implementing Energy Management System (EMS) to monitor and control
energy consumption in select Branches.
Conversion of conventional lighting to LED.
Installed Compost Machine for converting food waste into manure at Axis
Maintenance of unity power factor through 500 KVAR x 4 Nos of APFC
panels in auto mode for optimum use of power at Axis House.
Motion sensors installation for the workstations at Axis House.
Recycle and Reuse of Food waste, Dry waste and Sewage at Axis House.
Sewage Treatment Plant of 1 50 KL capacity recycles sewage water at
Axis House every day.
Use of water flow reducer to reduce the water consumption at Axis House
and Gigaplex (Airoli.)
Rain Water Harvesting at Axis House.
Introduction of bio blocks in urinals at Select Large Facilities
thereby saving flushing water.
Management's Discussion and Analysis Report
The Management's Discussion and Analysis Report for the year under
review, as stipulated under Regulation 34(2)(e) of the Listing
Regulations is given as an annexure to this report.
Pursuant to Regulation 21 of the Listing Regulations, the Bank has
already constituted the Risk Management Committee of the Board of
Directors. The details of the said Committee and its terms of reference
are set out in the Report on Corporate Governance, which is forming
part of this report.
The Bank has formulated and adopted a robust Risk Management Framework.
Whilst the Board is responsible for framing, implementing and
monitoring the said Risk Management Framework, it has delegated its
powers relating to monitoring and reviewing of risk associated with the
business of the Bank to the said Committee. The details of the Risk
Management Framework and issues related thereto have been explained in
the Management's Discussion and Analysis Report, which is annexed to
Business Responsibility Report
In terms of Regulation 34(2)(f) of the Listing Regulations, top 500
listed entities based on their market capitalization as on 31st March
every year are required to submit their Business Responsibility Report
(BRR) as a part of the Annual Report. The Bank's Business
Responsibility Report describing the initiatives taken by the Bank from
an environmental, social and governance perspective has been hosted on
the website of the Bank, www.axisbank.com. Any Member interested in
obtaining a copy of the BRR may write to the Company Secretary of the
Bank at its Registered Office.
Particulars of Loans, Guarantees and Investments
The provisions relating to Section 1 34(3)(g) of the Companies Act, 201
3 on particulars of loans, guarantees and investments are not
applicable to a Banking Company and as such no disclosure are being
made in this regard.
Corporate Social Responsibility
The Bank has constituted the Corporate Social Responsibility (CSR)
Committee of the Board of Directors, in accordance with the provisions
of Section 135 of the Companies Act, 2013, read with the Companies
(Corporate Social Responsibility) Rules, 2014, as amended.
The brief outline of the CSR Policy, including overview of the programs
undertaken, the composition of the CSR Committee, average net profits
of the Bank for the past three financial years, prescribed CSR
expenditure and details of the amounts spent by the Bank on CSR
activities during the year, have been disclosed as an annexure to this
At the 20th Annual General Meeting of the Shareholders of the Bank held
on 27th June 2014, M/s S. R. Batliboi & Co. LLP, Chartered Accountants,
Statutory Auditors of the Bank (Membership No.301 003E), were appointed
as the Statutory Auditors of the Bank to hold office as such from the
conclusion of the Twentieth Annual General Meeting until the conclusion
of the Twenty Fourth Annual General Meeting subject to the approval of
the Reserve Bank of India each year, on such remuneration as may be
approved by the ACB.
In terms of the first proviso to Section 1 39 of the Companies Act, 201
3, the appointment of the Statutory Auditors is required to be placed
for ratification at every Annual General Meeting. Accordingly, the
appointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, as
Statutory Auditors of the Bank for the financial year 201 6-1 7, is
placed for ratification by the Shareholders of the Bank at the 22nd
Annual General Meeting.
As recommended by the ACB, the Board of Directors has proposed the
ratification of appointment of M/s. S. R. Batliboi & Co. LLP, Chartered
Accountants, as Statutory Auditors of the Bank for the financial year
201 6-1 7 for the approval of the Shareholders of the Bank at the 22nd
Annual General Meeting. The Shareholders are requested to ratify the
said appointment of the Statutory Auditors and payment of remuneration,
as approved by the ACB.
In this regard, the Bank has received a certificate from the Statutory
Auditors to the effect that the ratification of their appointment, if
made, would be in accordance with the provisions of Section 141 of the
Companies Act, 2013.
As required under Regulation 33(1)(d) of the Listing Regulations, the
Statutory Auditors have confirmed that they have subjected themselves
to the peer review process of the Institute of Chartered Accountants of
India (ICAI) and that they hold a valid certificate issued by the Peer
Review Board of ICAI.
There are no qualifications, reservations or adverse remarks made by
M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, Statutory
Auditors of the Bank, in their report.
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Bank has appointed M/s. BNP & Associates,
Company Secretaries, Mumbai as the Secretarial Auditor of the Bank to
conduct secretarial audit.
The secretarial audit of the Bank has been conducted on a concurrent
basis in respect of the matters as set out in the said Rules and have
been provided in the Secretarial Audit Report for the financial year
201 5-1 6, which is given as an annexure to this report.
There are no qualifications, reservations or adverse remarks made by
M/s. BNP & Associates, Company Secretaries, Secretarial Auditor of the
Bank in their report.
Significant and Material Order Passed by Regulators or Courts or
Tribunals Impacting the Going Concern Status and Operations of the Bank
During the financial year 201 5-1 6, no significant or material orders
were passed by any Regulator, Court or Tribunal against the Bank, which
could impact its going concern status and operations.
Adequacy of Internal Financial Controls Related to Financial Statements
The Board has inter alia reviewed the adequacy and effectiveness of the
Bank's internal financial controls relating to its financial
The Board has discussed with the Management of the Bank the major
financial risk exposures and the steps taken by it to monitor and
control such exposures, overseen and reviewed the functioning of the
Whistle Blower Mechanism (which is a part of the Bank's Fraud Risk
Management Policy) and the findings in respect of the investigations
conducted on frauds, which were material in nature and the actions
taken by the Management in this regard.
CEO & CFO Certification
Certificate issued by Smt. Shikha Sharma, Managing Director & CEO and
Shri Jairam Sridharan, CFO of the Bank, for the financial year under
review, was placed before the Board of Directors at its meeting held on
26th April 2016, in terms of Regulation 17(8) of the Listing
The Board of Directors places on record its gratitude to the RBI, FIPB,
MCA, SEBI, other government and regulatory authorities, financial
institutions, stock exchanges, registrar and share transfer agent,
debenture trustees, depositories and correspondent banks for their
strong support and guidance. The Board acknowledges the support of the
Shareholders and also places on record its sincere thanks to its valued
clients and customers for their continued patronage. The Board also
expresses its deep sense of appreciation to all the employees of the
Bank for their strong work ethic, excellent performance,
professionalism, teamwork, commitment and initiative, which has led to
the Bank making commendable progress in today's challenging
For and on behalf of the Board of Directors
Place : Mumbai Dr. Sanjiv Misra
Date : 12th May 2016 Chairman